The steady increase in bankruptcy filings since 2005 may have finally leveled off. According to the American Bankruptcy Institute and National Bankruptcy Research Center, fewer individual bankruptcy cases were filed during the first six months of 2011 than the same period in 2010. In Massachusetts, personal bankruptcy filings are down about 20% from a year ago.
"The drop in bankruptcies for the first half of the year shows the continued efforts of consumers to reduce their household debt, and the overall pull back in consumer credit," said Samuel J. Gerdano, executive director of the American Bankruptcy Institute. The statistics show an overall 7.9% decrease: 709,303 personal bankruptcy filings this year versus 770,117 filings in 2010. More than 1.5 million personal bankruptcy cases were filed last year.
However, not all states are reporting a decrease in bankruptcy filings. Southwestern states, the hard-hit by the housing crisis, are still reporting high bankruptcy rates. Nevada remains the state with the highest number of bankruptcies per capita, although Nevada bankruptcy filings have fallen 16% this year compared to 2010. Bankruptcy filings have dropped significantly in Vermont, West Virginia, North Dakota and Washington, D.C.
So does bankruptcy actually help Massachusetts residents? Yes! Over 6.2 million personal bankruptcy cases have been filed in the United States since 2005, and many of these bankruptcies were filed as joint husband and wife cases. Our national adult population is around 250 million, so a ballpark estimate is that one adult out of 30 filed bankruptcy from January 2006 to July 2011. The national rate of repeat filers is around 10% (different sources estimate this rate at between 8% and 13%), so only one out of ten needed federal bankruptcy relief again. The rest were able to reorganize their finances and move on to a better future.
If you cannot pay your monthly expenses and need debt relief, call the Law Office of Robert W. Kovacs, Jr. toll-free at (877) 315-2641 and explore your options under the federal Bankruptcy Code. The bankruptcy laws contain many powerful provisions that can assist you in reorganizing your finances, eliminating overwhelming debt, and give you financial peace of mind.
